COVID-19

As pandemic worsens, will restaurants need to pull back again?

Marielle Segarra Jun 24, 2020
Heard on: Marketplace
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A Los Angeles restaurant worker wears a face covering and gloves for handling takeout orders, accompanied by pandemic-safety instructions. Mario Tama/Getty Images
COVID-19

As pandemic worsens, will restaurants need to pull back again?

Marielle Segarra Jun 24, 2020
A Los Angeles restaurant worker wears a face covering and gloves for handling takeout orders, accompanied by pandemic-safety instructions. Mario Tama/Getty Images
HTML EMBED:
COPY

As virus cases surge in Arizona, Florida, California, Texas and other states, the conversation has begun about whether it makes sense to at least partially close businesses like restaurants again.

What would that look like?

If you run a restaurant, you’d have way more food than you’d need to fulfill takeout orders, to start.

“What do you do with [food] long-term? You could try to sell it off to supermarkets,” said Mike Haller, a manager at UL Everclean, which advises restaurants on food safety.

Or you could sell the food directly to consumers — turning your restaurant into a little grocery store. You could also freeze the food and hope it stays good for a while.

Also, you’d have to call your suppliers and tell them actually you won’t be needing those 10 cartons of tomatoes, and you don’t know how many you need.

“Most of these food facilities, they go off of same-store sales so they can look back in history and find out like, well, we need so many pounds of shrimp this week. And with these disruptions, that makes it an absolute nightmare for knowing what to order because these are unprecedented times,” Haller said.

Shutting down again would also hurt sales. And a restaurant is not going to make up the difference with takeout.

All of this puts small restaurants in particular at risk. 

Vlad Rikhter is CEO of the tech platform Zenput. It advises big restaurant chains like Domino’s and Sweetgreen. He said if you own one location and it’s in a place under mandated lockdown, that could wipe you out. “Especially if you just ordered $10,000 worth of inventory, and you had to toss $5,000 of it out because you can’t hold it for three, four, five weeks, or whatever the time period is.”

Rikhter said the big chains would be in a better position to get through another round of lockdowns because they have lots of cash and lots of locations. 

COVID-19 Economy FAQs

Are states ready to roll out COVID-19 vaccines?

Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.

How is the service industry dealing with the return of coronavirus restrictions?

Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.

How are hospitals handling the nationwide surge in COVID-19 cases?

As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.

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